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The Owners - Strata Plan No 66375 v King

The Owners - Strata Plan No 66375 v King

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Case Copied 3 August 2018 75 min read

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Court of Appeal

Supreme Court

New South Wales

Summary available

Medium Neutral Citation: The Owners – Strata Plan No 66375 v King [2018] NSWCA 170
Hearing dates: 5 and 6 April 2018
Decision date: 03 August 2018
Before: Ward JA at [1];
Leeming JA at [335];
White JA at [388]
Decision:
1. Allow the appeal.
2. Set aside the orders made by Ball J as between the Owners Corporation (the appellant in these proceedings) and David and Gwendoline King (the respondents in these proceedings) and in lieu thereof order that judgment be entered in favour of the Owners Corporation against the Kings in the sum of $5,093,168.08, with costs.
3. Grant the respondents a certificate under the Suitors’ Fund Act 1951 (NSW), if applicable.

Catchwords:
BUILDING AND CONSTRUCTION – claim by owners corporation against persons alleged to be “developers” as defined by Home Building Act 1989 (NSW) s 3A – question of fact as to whether alleged “developers” were parties to building contract

APPEALS – drawing of inferences on appeal – evaluation of competing inferences – where primary judge failed to draw inference that respondents were parties to the building contract
BUILDING AND CONSTRUCTION – whether developers liable for “design defects” – statutory construction of Home Building Act 1989 (NSW) ss 18B and 18C – scope of notional contract pursuant to s 18C – whether breach of statutory warranty pursuant to s 18B(c)
Legislation Cited: Building Services Corporation Legislation Amendment Act 1996 (NSW), Sch 1
Building Services Corporation Legislation Amendment Bill 1996 (NSW)
Environmental Planning and Assessment Act 1979 (NSW) ss 76A(1), 81A, 122, 123, 125
Environmental Planning and Assessment Amendment Regulation 1998
Environmental Planning and Assessment Amendment Regulation 1999
Environmental Planning and Assessment Regulation 1994 (NSW), cll 78A, 79E, 79G
Evidence Act 1995 (NSW), ss 69, 87
Home Building Act 1989 (NSW), ss 3, 3A, 6, 7, 7A, 7B, 10, 18A, 18B, 18C, 18D, 18E, 18F, 18G, Sch 4 cl 107
Home Building Amendment Act 2011 (NSW), Sch 1 cll 1, 2, 3, 31
Home Building Regulation 1997 (NSW), cl 8
Interpretation Act 1987 (NSW), s 33
Strata Schemes (Freehold Development) Act 1973 (NSW), s 11
Strata Schemes Management Act 1996 (NSW), s 8
Suitors’ Fund Act 1951 (NSW)
Supreme Court Act 1970 (NSW), ss 75A(5), 101
The Contractors’ and Workmen’s Lien Acts 1906 to 1921 (Qld), ss 4, 6, 9, 10, 19
Uniform Civil Procedure Rules 2005 (NSW), r 51.53
Cases Cited: Ace Woollahra Pty Ltd v The Owners – Strata Plan No 61424 (2010) 77 NSWLR 613; [2010] NSWCA 101
Atkinson v Crowley [2011] NSWCA 194
Australian Guarantee Corporation Ltd v Balding (1930) 43 CLR 140
Baron Corporation Pty Ltd v Owners of Strata Plan 69567 [2013] NSWCA 238
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1
Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47
Chan v Acres [2015] NSWSC 1885
Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd (1989) 21 NSWLR 160
Dilosa v Latec Finance Pty…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NSWCA 170
Decision Date: 03 August 2018

CaseChat Overview and Summary

The Owners - Strata Plan No 66375 (the appellant) brought proceedings against David and Gwendoline King (the respondents), alleging they were "developers" within the meaning of the *Home Building Act 1989* (NSW) and therefore liable under that Act. The central dispute concerned whether the Kings were parties to a building contract, which would establish their status as developers.

The Court of Appeal was required to determine whether the primary judge erred in failing to draw the inference that the respondents were parties to the building contract. Further, the court had to consider the statutory construction of sections 18B and 18C of the *Home Building Act 1989* (NSW) to ascertain the scope of the notional contract created by section 18C and whether the Kings had breached a statutory warranty under section 18B(c) concerning "design defects".

The Court of Appeal found that the primary judge had erred in not inferring that the Kings were parties to the building contract, thereby establishing them as developers. The court reasoned that the evidence, when viewed holistically, supported the conclusion that the Kings had entered into the contract. Consequently, the court held that the Kings were liable for breaches of statutory warranties, including those relating to design defects, as contemplated by the *Home Building Act 1989* (NSW).

The appeal was allowed, the orders of the primary judge were set aside, and judgment was entered in favour of the Owners Corporation against the Kings for the sum of $5,093,168.08, together with costs. The respondents were also granted a certificate under the *Suitors’ Fund Act 1951* (NSW), if applicable.

Orders

Orders of the court

1. Allow the appeal.

2. Set aside the orders made by Ball J as between the Owners Corporation (the appellant in these proceedings) and David and Gwendoline King (the respondents in these proceedings) and in lieu thereof order that judgment be entered in favour of the Owners Corporation against the Kings in the sum of $5,093,168.08, with costs.

3. Grant the respondents a certificate under the Suitors’ Fund Act 1951 (NSW), if applicable.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	The Owners – Strata Plan No 66375 v King [2018] NSWCA 170
Hearing dates:	5 and 6 April 2018
Decision date:	03 August 2018
Before:	Ward JA at [1]; Leeming JA at [335]; White JA at [388]
Decision:	1. Allow the appeal. 2. Set aside the orders made by Ball J as between the Owners Corporation (the appellant in these proceedings) and David and Gwendoline King (the respondents in these proceedings) and in lieu thereof order that judgment be entered in favour of the Owners Corporation against the Kings in the sum of $5,093,168.08, with costs. 3. Grant the respondents a certificate under the Suitors’ Fund Act 1951 (NSW), if applicable.
Catchwords:	BUILDING AND CONSTRUCTION – claim by owners corporation against persons alleged to be “developers” as defined by Home Building Act 1989 (NSW) s 3A – question of fact as to whether alleged “developers” were parties to building contract APPEALS – drawing of inferences on appeal – evaluation of competing inferences – where primary judge failed to draw inference that respondents were parties to the building contract BUILDING AND CONSTRUCTION – whether developers liable for “design defects” – statutory construction of Home Building Act 1989 (NSW) ss 18B and 18C – scope of notional contract pursuant to s 18C – whether breach of statutory warranty pursuant to s 18B(c)
Legislation Cited:	Building Services Corporation Legislation Amendment Act 1996 (NSW), Sch 1 Building Services Corporation Legislation Amendment Bill 1996 (NSW) Environmental Planning and Assessment Act 1979 (NSW) ss 76A(1), 81A, 122, 123, 125 Environmental Planning and Assessment Amendment Regulation 1998 Environmental Planning and Assessment Amendment Regulation 1999 Environmental Planning and Assessment Regulation 1994 (NSW), cll 78A, 79E, 79G Evidence Act 1995 (NSW), ss 69, 87 Home Building Act 1989 (NSW), ss 3, 3A, 6, 7, 7A, 7B, 10, 18A, 18B, 18C, 18D, 18E, 18F, 18G, Sch 4 cl 107 Home Building Amendment Act 2011 (NSW), Sch 1 cll 1, 2, 3, 31 Home Building Regulation 1997 (NSW), cl 8 Interpretation Act 1987 (NSW), s 33 Strata Schemes (Freehold Development) Act 1973 (NSW), s 11 Strata Schemes Management Act 1996 (NSW), s 8 Suitors’ Fund Act 1951 (NSW) Supreme Court Act 1970 (NSW), ss 75A(5), 101 The Contractors’ and Workmen’s Lien Acts 1906 to 1921 (Qld), ss 4, 6, 9, 10, 19 Uniform Civil Procedure Rules 2005 (NSW), r 51.53
Cases Cited:	Ace Woollahra Pty Ltd v The Owners – Strata Plan No 61424 (2010) 77 NSWLR 613; [2010] NSWCA 101 Atkinson v Crowley [2011] NSWCA 194 Australian Guarantee Corporation Ltd v Balding (1930) 43 CLR 140 Baron Corporation Pty Ltd v Owners of Strata Plan 69567 [2013] NSWCA 238 Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47 Chan v Acres [2015] NSWSC 1885 Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd (1989) 21 NSWLR 160 Dilosa v Latec Finance Pty…